Well … you’re right about there being less wrecks (though it’s probably wrong to wish for deer to run into the path of oncoming traffic and sacrifice their lives — all so you can get some collision work).

A recent survey by the Insurance Research Council (IRC) shows a dramatic drop — 17 percent — in the frequency of auto accidents. For reasons such as this — along with increased competition, lower profit margins and more insurance-company involvement — it’s more important than ever for collision repair shops to market their services to bring in new business.

Just what are shops doing to get their names out there? From what sources is business coming from? How much money does the average shop make?

This year’s Market Profile has the answers (and not one of those answers includes the sacrificing of deer)!

On average, shops grossed $543,424 in 1999, up from $509,900 in ’98. Their average gross profit percentage was 32.6 percent. Respondents attribute 43.5 percent of their sales to parts and 56.5 percent of their sales to labor. On average, the gross profit margin on parts was 27.3 percent and 48.8 percent on labor.

When comparing their 1999 profit margin to their 1998 profit margin, 44.2 percent of respondents said their profits increased in ’99 by an average of 8.6 percent, 41.9 percent said their profits stayed the same, and 14 percent said their profits decreased by an average of 10.6 percent.

Despite all the problems and challenges that come with running a collision repair business, respondents are surprisingly optimistic regarding their shops today and in the future — and they’re even more optimistic this year than last year. Those who answered "yes" increased from 68 percent last year to 74.2 percent this year, and 77.7 percent said they think their shops will be even more successful in the next five years.

Major Challenges Respondents Said Their Businesses Will Face in the Next Year and How They Plan to Overcome Them
Challenge	Solution
• "Getting two more DRPs."	"Improving our reputation."
• "Getting more DRP referrals and increasing non-DRP estimates."	"More direct contact with insurance agents."
• "Finding new employees."	"Enhancing benefits."
• "Skyrocketing prices of paint and materials."	"Seek more effective ways of doing business."
• "Making a profit that justifies the investment and headaches."	"Not sure."
• "Securing more DRP accounts."	"Better marketing."
• "Competing with DRPs."	"Get legislation changed back to a free market."
• "Setting management procedures as it relates to DRP and customer expectations."	"Education and outside consultants."
• "Making time for training."	"Scheduling/planning."
• "Getting customers to pay for a complete diagnosis and repair."	"Educate them as to my equipment and time costs."
• "Finding and keeping good employees."	"In-house training and incentives for above- average employees."
•"Competition."	"Advertising, quality repairs."

It’s worth noting that shop owners who use the Internet as a marketing tool increased from 11.6 percent last year to 16.3 percent this year.

Work coming from DRPs is up from 9.8 percent last year to 13.7 percent this year.

• The average shop spends $5,500 per year on advertising (the median is $2,200, meaning 50 percent spend less and 50 percent spend more).

• 88 percent of shops stress repair quality in their advertising; 62.4 percent stress experience, 53.6 percent stress services offered, 40 percent stress shop and technician certification, and 20.8 percent stress prices.